LMA launches market-wide consultation on new CBAA model wording

The Lloyd’s Market Association (LMA) has launched a market-wide consultation on the new Computable Binding Authority Agreement (CBAA) model wording, developed with support from Lloyd’s, LIIBA, MGAA, and the IUA.

The draft CBAA model wording is the result of months of work by experts from the London delegated authority (DA) community and the Associations. It aims to provide an updated, clear, and robust binding authority agreement.

The proposed wording is organised into 15 modules and designed as a ‘digital object’ for use in ‘data-first’ contract builder software.

Additionally, a new digital library will be created to store each component of the new wording—both words and numbers—in a modular format. This will introduce fully computable contracts of delegation for the DA market.

The consultation seeks to engage all DA stakeholders, including managing agents, coverholders, and brokers, to ensure smooth adoption and implementation of the new model wording and associated systems.

The consultation will proceed in phases, with different modules released at each stage, and will run until the end of the year. The current phase is set to close on 30 September 2024.

Nigel Roberts, AEGIS London and Chair of the LMA’s Delegated Authority Committee, said, “A digital marketplace must include DA business. Over the last two years, we have been working towards creating a new computable contract that the DA market can adopt with ease and benefit from in terms of efficiency. I very much hope the whole market will take time to participate in the consultation, so that we can step seamlessly into a new era of modular wordings stored online for the first time – a long overdue step for underwriting efficiency.”

Carla Wise, Delegated Authority Manager at the LMA, commented, “We are moving closer towards a more digitally connected marketplace. This consultation is an important milestone in the modernisation of London market DA business. We invite feedback from all those involved to ensure that the proposed wording is right for the market and can be easily adopted by all brokers, underwriting teams and coverholders. We thank those who have been and continue to be involved.”

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